South Korea's Kia Motors said Friday that weakening demand in the world's largest auto market, China, contributed to a more than 16 percent drop in third quarter profit.
Slowing economic growth in China and a stock market rout have hit sales hard in a market crucial to foreign auto makers, especially given weak sales in Europe and a still recovering United States.
The weaker demand has forced manufacturers to slash prices and cut production, and Kia said its net profit for the July-September period had fallen 16.3 percent from a year earlier to 550 billion won ($487 million).
In a conference call, Kia chief financial officer Han Chun-Soo said the company hoped to boost market share by taking advantage of a purchase tax reduction being offered by the Chinese government on car models with smaller engines.
"We expect our plant operation ratio and market shares to recover after benefiting from a tax break on our smaller vehicles," Han was quoted as saying by Bloomberg News.
Kia is the affiliate of South Korea's largest automaker, Hyundai Motor, which reported an even larger profit drop of 25 percent on Thursday which it attributed to the slump in China deliveries.